Piracy and Its Split Personalities

James Williams writes: "It seems like no matter where I go, I hear
people talking about piracy and its destructiveness. There seems to
be a general consensus that piracy is harmful to the industry. It's
easy to understand why people share this view, since on the surface,
piracy seems to lead to lost revenues. However, I've looked into the
problem at a deeper level and come to the conclusion that piracy is
actually quite beneficial. How, you ask? Well, keep reading."

Myths

First, let's consider some arguments people have about piracy. They
call it stealing, because you are taking something you didn't pay for.
What I find ironic about this is that outside the field of software,
music, and movies, copying a company's product is typically considered
acceptable. If I sew my own clothes and grow my own food, nobody will
accuse me of stealing from the fashion designers and the farmers. Yet
the result is the same -- I'm creating something for myself instead of
paying money to the people who normally provide it. "But you didn't
write the software," I hear you exclaim. That's true, but I didn't
design the clothes I wear, either. "But sewing your own clothes and
growing your own food takes considerable time and expertise. Copying
software is as easy as clicking a couple icons." Again, true, but the
process of copying something is unimportant. Only the end result
matters. Do you think if I copied a piece of software in a way which
required considerable time and expertise, it would be acceptable? I
didn't think so. "But the cost in software is in the development, not
the materials it's distributed on." The same can be said for most
things in life. You can't honestly tell me it costs $40 to produce a
pair of jeans, or $20,000 to build a car. The design is the primary
cost in these items as well.

The benefits

Now, allow me to move on to the most ironic part of all this. What
most people fail to realize is that piracy actually earns companies
more money. Imagine that there is a new computer game on the market.
You will probably become aware of it in one of four ways:

You walk into a computer store and see it on the shelf.

You see an advertisement for it in a magazine, TV, etc.

You read a review about the game.

One of your friends who has the game tells you all about it, and
maybe even lets you play it.

Take a look at the four choices. You've probably learned about
products through each of these ways. Which one has the strongest
impact on your desire to acquire the game? I bet it's number 4, isn't
it? In fact, I wouldn't be at all surprised if you can remember a
time when a friend showed you a game or other product, and you were so
impressed, you ran out and bought yourself a copy. This kind of
impression rarely comes from the other three choices. Of course, you
probably didn't really run out and buy a copy of the program. Your
friend made you a copy of his, right? But what if he was unable to at
the time? What if you had to wait a week or more before he could get
you a copy? If your friend sold you on the game as well as my friends
often do on me, you wouldn't want to wait a week. So, you run out and
buy a copy. Or maybe you're just really honest and bought yourself a
copy because it was "the right thing to do". Either way, you end up
paying for your copy.

Okay, so your friend has convinced you just how badly you want this
game. But what if there were no piracy? Your friend wouldn't have had
a copy to show you, since he pirated his copy from a friend, who in
turn pirated a copy from someone else, and so on. Let's assume that
95% of the copies of this game are pirated. The game makers will
scream bloody murder, saying they lost 95% of their potential profit
to piracy. Of course, anyone who has thought about it for more than 2
nanoseconds will realize that of the 95% of the population that
pirated the game, only a small number of them would have actually
bought the game if they couldn't have gotten it illegally.

If there's one thing piracy is good at, it's at spreading popularity
of a product to as many people as possible. Countless numbers of
people will become aware of a product when otherwise they would have
simply looked past it. Piracy is crucial to the success of virtually
any product. If a product is of good quality, the piracy will
increase. Once the product has been distributed widely enough, it's
inevitable that people everywhere will be talking about it. All this
talk, also known as "buzz", drives up the interest in the product from
people who don't have their copies yet. These people can try to find
a friend who has a copy to give them. But, as is often the case, these
people won't be able to find anyone who can give them a copy, so they
are forced to either buy the product or do without. Because of the
buzz, the desirability of the product is increased, and people like
these will be more likely to choose to buy it. Think about stuff
you've bought. Aren't you more likely to buy something that
everyone's talking about? Yep, me too. Let's consider the game I
mentioned previously. Suppose the game was popular enough to spread
20 million copies through both sales and piracy. If the game was not
pirated, only the people who saw the game in the store, ads, or
reviews would have bought the game. Because there are fewer people
with the game, there is not nearly as much buzz, leading most people
to overlook it. In the end, the game sells 20,000 copies. Compare
this to the original scenario, with 20 million copies. Even with the
piracy, the game still sold a million copies. In my book, that's
quite a difference.

Yes, I can hear you now. You're saying this is all speculation, and
that there is no way to know how many copies would really be sold
without piracy, and there is no way to perform a scientific study
because there is no way to control piracy to get accurate results. I
disagree, of course. Consider programs that come with some form of
copy protection. They never seem to sell as well as those without.
Most people attribute it to the inconvenience of the copy protection
schemes. But if you have a game of truly excellent quality, you're
likely to overlook the inconveniences to get to it. I tend to believe
that the primary reason for the poor sales is that the copy protection
actually works to some degree, limiting the number of copies floating
around. Naturally, for every copy protection scheme invented, someone
writes a crack program to get around it. But not everybody has access
to these cracks. Because of the reduced amount of piracy of these
programs, they generate less interest from the public than software
that is widely pirated, and that, I believe, is the reason copy
protection reduces sales.

The MP3 revolution

Let's take a step away from software piracy for a minute, and look at
the piracy of music. The RIAA is screaming about people stealing
music, and they like to quote Napster as being the reason for
countless millions in lost revenue. If you think about it, Napster is
little more than a means of distributing music to the people who like
to listen to it, even though they haven't paid for that music. I can
think of another medium which does the same thing, only on a scale
many orders of magnitude larger. It's called radio. The radio
stations broadcast music to hundreds of millions of people around the
world who also have not paid to hear the music. Yet nobody has a
problem with this. There seems to be a double standard in here
somewhere. I know, I know; with the radio, you only hear songs that
have been released, and you only hear them when the disc jockeys
decide to play them. But the songs people want are generally the ones
on the radio, and if people agreed to only play the songs they pirate
a few times a day like the radio does, do you really think the RIAA
would stop their complaining? And besides, nobody seems to have a
problem if I record a song from the radio onto tape. What's that you
say? The quality isn't as good that way? Does that mean low quality
mp3s would be considered acceptable? No, I don't think so either.

Now, let's take this a step further. Imagine if broadcasting music on
the radio was suddenly considered piracy. All of a sudden, the only
music you would get to hear would be either music you buy at the store
or something someone pirates to you. Would you buy an album if you'd
never heard any of the songs on it? I wouldn't, and I don't know of
anyone who would. Without the radio, music sales would dry up almost
overnight. But, thanks to the radio (which might be considered the
largest source of pirated music), we can hear the songs we like, and
then head down to the local record store and buy them. The benefits
of piracy kind of make sense when you look at them this way, don't
they?

I happen to be in a position where I depend on mp3s to hear new music,
simply because none of the radio stations around where I live play my
type of music any more. There used to be three of them, but they have
all changed format since then. I can honestly say that being able to
hear my music through mp3s on the Internet has led me to buy more than
one CD. That's money I would have spent elsewhere otherwise. And the
result of all this is that everyone comes out happy in the end. I
will admit, of course, that I don't buy the CDs for every song I
download, just as I didn't buy CDs for every song I used to hear on
the radio. But at least I buy something, and I firmly believe I'm not
the only person on this planet doing this.

Statistics seem to back me up. The RIAA reported sharp profit
increases in 1999 during their fiasco with the mp3 movement. When
cassette tapes became available for the first time, the recording
industry protested, saying they would lose money to people copying the
music. The invention of the cassette tape actually gave their profits
a boost. The story for VCRs and the movie industry reads about the
same way. What we have now with mp3s is simply another format for
recording music. The recording industry made a huge profit from tapes
because they finally embraced the technology instead of fighting it.
Even though they are already making incredible profits in the middle
of their battles with mp3 music, they stand to make even larger
profits by embracing it.

To recap: Piracy is good for business primarily because it spreads
awareness of a product to the largest number of people possible.
Companies who fight it often find that their efforts do more harm than
good, and the more severely they strike out against the pirates, the
more they find themselves adrift in bad PR. Oftentimes, a company's
attempts to silence the voices it opposes only cause those voices to
grow louder. As the media latches on to the struggle, people are
forced to take sides on the issue. The end result is acceleration of
the process and proliferation of the information the company wanted to
keep quiet in the first place. Remember DeCSS? Do you think it would
have become so widespread or as widely known if the MPAA had left it
alone? I suspect that few people would even know what DeCSS is had
that been the case. Even though DeCSS really isn't about piracy, the
results are the same. We are seeing the same ripples in the mp3
arena, where it really is about piracy. So until the people in power
come to understand the positive benefits of piracy, we can only expect
to see the battles continue to rage on. Oh, and the next time you
feel like retaliating against a company by mass pirating their stuff,
just remember that you might end up helping them more than hurting
them.

References

James Williams <virtex@bigfoot.com> is a
graduate student at the University of Kansas where he is finishing a
Master's degree in computer science. Throughout his life, he has
remained a computer enthusiast, learning various programming languages
and operating systems along the way. He is also an active member of
his local user's group, KULUA (Kansas Unix and Linux Users
Association). In addition to computers, he also enjoys writing,
drawing, bicycling, and music.

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Recent comments

Re: piracy pros and cons
Me, I find that if I pay very little attention to others opinions, I live a much more simple and happy life. In other words, this argument's pointless. Cease preaching and commense pirating or not as the case may be (individually). You can't stop me, and likewise I can't make you. If you want to change the world, stop surfing the net and do something useful. oh, and start with something that might make a possitive impact, like feeding the children in ethiopia. The software company isn't being persecuted, and you ain't their champion (you don't make enough money). Ok, done now, Gotta copy Gladiator (for the computer upstairs of course, that doesn't have a dvd). Divx is another wonderful invention :)

Hang on a minute
I have a question to ask of all you people who disagree with this article. How many of you record a song that you like from the radio? How many of you record a movie from the television? How many of you have bought a "cheap" video or CD from a market stall?

Recording something onto tape is the same principal as recording music from the Internet onto your PC. It makes no difference as to whether the source paid for the music or not. Incidentally, Napster do not distribute the music, they merely provide the software that gives you access to it. I don't see Metallica suing the radio manufacturers because I may have recorded one of their songs from the radio, yet they get annoyed with Napster doing essentially the same thing.

For a song to become an MP3, it must have either been originally recorded as one, or, a CD must be decoded. This then must mean that someone BOUGHT a CD and recorded it onto their PC at some point. So, when you download or "record" an MP3 from someone on Napster, there is a damn good chance that the person you are downloading it from has paid for it. Hmm, this sounds like radio....

A prime example of this, is 90% of my MP3 collection is encoded from CDs I have already bought. So therefore, I have paid for it, thus the same principle applies to me being on Napster as it does to the radio, no? And before I get told that I probably didn't pay as much as radio stations do for my music, well Napster doesn't have as large an audience as radio either.

Bullet points
I don't have time for the bullet points tonight, sorry. But since you felt your rebuttal was important enough to email me about it: Scarcity is the only standard -- not only for property, but for value as well. That someone would consider anything else to be so is a tribute to the amount of lobbying money spent by the Disneys of the world in this past century, and the amount they'll still be throwing at their lawyers in the one to come.

&quot;Tough&quot;
Someone said up above, "If you don't like the price or licensing terms for a piece of music, tough -- the work is the original creation of someone else's mind, and you will simply have to do without it."

The real story is, "If you don't like people disregarding your price and licensing terms, tough -- you should have gone into a field where success is not based on someone's inability to copy an intangible."

Both art and imitation came along before capitalism, and I imagine they'll both be around longer in the end.